Continuos Innovation: Revised

As part of an upcoming e-book for my Digital Civilization Class, I have been revising and synthesizing some of the ideas I've posted about on this blog. The meat of my contribution to the chapter on Intellectual Property and Creative Commons has to do with the idea of continuous innovation. The idea is that companies today should worry less about patents and patent infringement by copycats, and more about continuous innovation: bringing new ideas to the table and leaving their copycats in the dust. I first got this idea from Jared Smith, my manager while I worked as a software engineer at Qualtrics, Inc. The idea stuck with me, and I think its a great solution to going around the broken patent system instead of waiting for it to fix itself. Here's my revised section on the matter:

Patent Law Reform: Continuous Innovation

In the end, there are just too many problems with the patent system. So many people want information to be liberated, and to be done with the patent system altogether. That's not necessarily a good idea. We need something to protect the small guys from the big guys. If I go start a company selling some cool new product or invention, what's to stop some large company from taking my idea and stomping all over me, selling my product for less than I can and running me out of business? And let's say someday I did become big. Does that mean I lose all protection from any further innovations I create? As in other large companies are free to take my product and make it an essentially worthless product, selling it for cost just so I don't get the profits? Or maybe some little guy has some contacts in China that can make essentially the same product (though a crappier version), but sell it for a quarter my price. What protections should I be afforded then?

Some people might say that if other companies can draw customers away from you with a twin product, that's just how the market works. Others want protection and rights to their own inventions. Even if other companies violate patents, enforcing patents is messy. Simply viewing the countless legal battles over patents is a clear indication that the system is broken. Some form of patent law and protection is important, but waiting for patent reformation is like waiting for the US to pay off its national debt. It’s not going to happen anytime soon.

This is why the citizens of the digital world must learn to go around the mountain that is the broken patent system. This takes two forms. First, consumers need to let the giant media and tech companies know how they feel about their pointless patent disputes. Patent trolls should be digitally hazed until they leave others alone and go get a real job. Consumers should send a clear message to other companies like Apple and Samsung that their patent battles are not ok. They need to lay aside their differences and return to focusing all their efforts on innovating and bringing great new products to the market.

This brings up the second form of going around the mountain. Companies need to stop worrying about their competitors and others violating their precious patents. Instead, they should rely on the idea of continuous innovation. I learned this best while I was working as a software engineering intern at Qualtrics. They have several copycat competitors, but instead of whining about it and calling foul, they simply continue to innovate, bring more new and awesome features to the table, and always striving to innovate ahead of the competition. I think their client page is a testament to the great job they're doing.

So that's the best answer. We still need to design the system to protect against big company bullies, but if companies relied on continuous innovation to justify their existence, and left their copycats in the dust, it would be a great start. Consumers can encourage this by acting accordingly in the market, rewarding the innovators and shunning the copycats. As companies cater to the consumer, ditch their patent battles and start competing with each other, the consumer will ultimately win. Competition in the same market-space is always great for the consumer because it drives prices down and brings innovation out. And that's how companies in America and America itself will continue to succeed: by bringing the best ideas to the table and letting the market respond.

IP&CC: An Annotated Biliography

In my research about intellectual property, I have mostly focused on the patent system and its problems. This is the are of intellectual property most relevant to me and I am a software engineer, finishing up my degree in computer science at Brigham Young University. My research has mostly drawn on my experience as a software engineer working at Qualtrics, where my manager Jared Smith (formerly head of product over Google Asia) inspired me with the idea of continuous innovation. I also took a class on doing venture startups from Josh Coates, the founder and former CEO of Mozy and current CEO of Instructure where I also currently work. This is where I gained most of my foundational knowledge about the different types of intellectual property. Lastly, must of my research has been done online, searching for great books relevant to my study and looking for the thought leaders on patent reform.

My group is making the claim that laws and systems related to intellectual property are broken in our increasingly digital world, specifically the patent and copyright systems. I have focused on patents, and as such, my annotated bibliography concerns further reading and thought leaders related to the broken patent system and solutions to going around it.

Further Reading

Jaffe, Adam B. and Josh Lerner. (Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It. Princeton, New Jersey, 2004). An important look at how the US patent system is stifling innovation rather than fostering it as it was originally designed to do. Also puts forth a three part solution to fixing the patent system: create incentives to motivate parties who have information about the novelty of a patent; provide multiple levels of patent review; and replace juries with judges and special masters to preside over certain aspects of infringement cases. [I found this as I was looking for others proposing patent reform by going around the patent system and stumbled across this post: Patent Reform without Congress].

Mulligan, Christina and Timothy B. Lee. (Scaling the Patent System, NYU Annual Survey of American Law, Forthcoming, 6 March, 2012). Proposes a simple but novel answer to the question about why firms in some industries ignore patents when developing new products. The answer is that firms are unable to discover all the patents their activities might infringe as the cost of finding all such relevant patents is prohibitively high. Attacks core premises of patent law, and provides suggestions to reforming the patent system to alleviate the problems created by non-indexable patents. [I found this searching for papers about the problems with the patent system].

NPR. (When Patents Attack, 22 July, 2011). A very interesting story about companies (i.e. patent trolls) acquiring and using patents to extort money from other companies, much like mafia shake-downs. Notes the general opinion of most software engineers and their disapproval of the patent system and patents in general. [I found this article mentioned in several articles critiquing the patent system and its existing problems].

Thought Leaders

Paul Graham (The Patent Pledge, August 2011). Paul Graham is a co-founder of the Y-Combinator seed capital firm, one of the most successful such firms helping many startups in their early days. His article The Patent Pledge puts forth the idea of creating a social norm where large companies agree not to go after small companies for patent infringement, and instead letting them gain traction and either licensing the patents or reforming as they get larger to not infringe. He is important as an influential thinker in the technology startup world and his idea of patent reform through social pressure vs. waiting on government reform. [I found a link to Paul's article through an article on patent reform, though Paul Graham and Y-Combinator are well-known in the technology world].

Baio, Andy (A Patent Lie: How Yahoo Weaponized My Work, Wired.com, 13 March , 2012). Andy Baio writes an opinion article each week for Wired, often about things related to intellectual property. Wired is well-regarded in the tech world. His article about how Yahoo used one of his patents in an attack against Facebook, and his point that patents are unnecessary in the software world as software code is covered by copyright law anyway, aligns well with our position on patent reform. [I found this article via a LinkedIn mailing on top headlines on the Internet the week the article was published].

Lawrence Lessig (Lessig 2.0). Lawrence Lessig is an academic an political activist. He has spoken out for copyright reform, legislative reform, free culture and the threat of patents to free/open source software and innovation, and net neutrality. [Found at the suggestion of Dr. Gideon Burton].

And I thought patents used to be cool...

Recently I found an article on Wired called A Patent Lie: How Yahoo Weaponized My Work. The article was written by Andy Baio, a software engineer turned tech writer and entrepreneur who writes a weekly column for Wired and did things like help start Kickstarter. 

His article is all about how Yahoo acquired his company and convinced him and his coworkers to disclose anything patentable to Yahoo so Yahoo could file for the patents. Andy, weary of what Yahoo intended to do with said patents, hesitated, but Yahoo insisted they only wanted the patents for protection against other companies and patent trolls. They just need to build their stockpile of nukes not to ever use them, but to convince the other guy not to set off his. Andy and his group finally complied, and years later Yahoo was filing a patent claim against Facebook, most likely using one of the patents Andy helped Yahoo gain. 

I used to think patents and patent-holders were awesome. To be recognized as the inventor of something is really cool. Too bad the patents have been turned into weapons and totally abused. Andy thought he was just helping Yahoo protect itself, but years passed and leadership changed several times. Now his work is being used in ways he never intended and never would have agreed to. All software engineers and other people out there take note: when considering whether or not to help your company obtain patents for your inventions, be weary. They may claim it's only for protection and not for evil, but things change. 

Of course, they can always file the patent for you anyway, listing you as a non-compliant inventor...

Intellectual Property: Summary of Types

People often get each of the different types confused. A patent lawyer is not the same thing as a copyright lawyer, just like a patent and a copyright are two different things. Here is a quick summary of each form of intellectual property:

Patents can be granted for new, useful, and non-obvious inventions for which the inventor applies for in a formal patent application, and grants them certain protective rights. Inventions qualifying for patents in the US fall into three categories: utility, design, or plant.

In contrast, copyrights are automatically granted to the creator of an original work at the time of creation, and apply to things like books, movies, music, and art.

Trademarks refer to a mark used to promote a brand or product, like a word, symbol, phrase, or name. They can be unregistered or registered, with registration indefinitely renewable.

The last form of intellectual property is a trade secret. It’s a company’s secret sauce they haven’t disclosed to the public, like Google’s search engine algorithms. They last indefinitely, but there’s no protection. If someone discovers it or invents it separately, it’s fair game.

Each of the forms of intellectual property is different, has different requirements to qualify as that type of intellectual property, and different protections afforded to owner. In the following sections, we will examine in depth each form and the problems that have risen with each in the digital era.

Intellectual Property: Copyright, Trademarks, and Trade Secrets.

Copyright

A copyright is the exclusive legal right to reproduce, publish, sell, or distribute the matter and form of something (as a literary, musical, or artistic work). The power to administer copyrights is given to Congress in what is known as the “Copyright Clause” in Article I, Section 8, Clause 8 of the Constitution:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

How do you obtain a copyright? Unlike a US patent, a copyright is created automagically upon creation of the “Original Work of Authorship.” Optionally, one can file with the US Copyright office, but that’s not strictly necessary. A copyright applies to:

1. Any writing (including code)
2. Drawings
3. Paintings
4. Computer generated image, etc
5. Sculptures
6. Architectural designs / drawings
7. Music
8. Videos
9. Audio
10. Video games
11. Film
12. And more!

Things that can’t be copyrighted that sometimes people think can be:

1. A process or method
2. An idea
3. A machine
4. A title of phrase

A copyrighted item must take substantive and nontrivial mental activity, be a fixed creation of the mind, nonfunctional, and original. A copyright expires like a patent does, though lasts much longer, currently expiring when whichever of the following comes first:

1. 70 years after the death of authors(s)
2. 95 years after publication
3. 120 years after creation of anonymous works or works made for hire.

Copyright law is rather strict, so some choose to place their items under the public domain, meaning anyone can use them. Others have come up with the idea of copyleft, a less restrictive form of copyright. There is a spectrum of copyleft implementation, most notably in the software world, from less restrictive to more restrictive. The BSD or Berkeley Software Distribution License is restrictive only in the sense that you must cite the author of the code. Other than that, it can be used however you’d like, and is on the less restrictive end of the spectrum. LGPL is a little more restrictive in that the originally source code under LGPL license must remain open source, but it can be linked to and use non-LGPL (most likely closed-source) code. GPL is the most restrictive. It requires its source code to always remain open, any modifications to the code must be made open, and cannot be linked to non-GPL software. Many companies that make their own programs they don’t want to make GPL and open to everyone have to take care not to use GPL code.

Trademark

A Trademark is also nown as a product identifier. Its a device (as a word) pointing distinctly to the origin or ownership of merchandise to which it is applied and legally reserved to the exclusive use of the owner as a maker or seller. A trademark is automatic when you user it in commerce for a while. Optionally, it can be registered with the US Patent and Trademark Office (USPTO). The little ™ or SM marks on packages don’t really mean anything as those are automatic and anyone can use them on product labels, etc. The ® actually does mean something: the trademark is actually registered with the USPTO. Trademark registration lasts 10 years, and can be renewed indefinitely.

Trade secrets

A trade secret has no expiration. It’s simply something a company has chosen to keep secret instead of applying for the appropriate intellectual property protection. There’s no expiration to a trade secret, but is someone discovers your trade secret or independently comes up with it, the company that originally had the trade secret has no protection.

Intellectual Property: Defining Patents

The term patent stems from the Latin word patere, which means to lay open. The patent holder lays open or describes something for all to see in a patent, but with US patent law the patent holder is granted 20 years of preotection and supposedly exclusive rights to the productino of the item in the patent. Patents are so difficult to enforce, so they basically become marketing techniques. There are three different types of patents:

1. Utility patents (eg. method, process, or machine)
2. Design (eg. look & feel)
3. Plant (eg. flowers)

Yes, you can patent flowers. Crazy, right? Along with the three patent types, US patent law lays out several requirements to being granted a patent in the US:

1. Must be useful.
2. Must be credible.
3. Must be practicable.
4. Must be non-obvious to someone in the industry.
5. Applicant must be inventor.
6. Applicant must be the first to invent in the US.
7. Can't be known or used by others in the US.
8. Can't be published more than 1 year ago.
9. Can't be in public use or on sale in the US more than 1 year.
10. Can't be abandoned.
11. Can’t have a foreign patent older than 1 year.

There’s also something called a provisional patent, somewhat like a patent draft. It holds your place in line to actually obtain the patent, but discloses your secret so someone else can file for a patent very similar.

Point seven in the requirements list usually has the term “prior art” associated with it. This simply refers to evidence that the patent-pending item was used or known before a patent was granted. That way if a small company invents something new and start selling it, a larger company can’t rush in a patent application and bully out the smaller company. The small company still has prior art, namely their item on the market. However, they must apply for the patent within one year, and even then enforcing the patent and trying to prevent other companies from producing the same item is difficult. It can cost a lot of money in legal fees, and another company can simply tweak one little thing and claim they are producing something entirely different, not infringing on the patent. If the original company tried to prove otherwise, it would take a lot of time and money.

Along with patents comes the idea of patent trolls, or non-practicing entities. A patent troll is basically an empty or dead company who owns nothing but patents. They don’t have an active product on the market using those patents, and they might not even have been the original owners of the patents since patents are transferable. Patent trolls try to seek money from other companies they feel are selling products or using in some way items falling under their patents in some way. They threaten with legal battles over these patent violations, and sometimes companies end up paying some lump some to these trolls because they just want them to go away instead of being drawn into lengthy and costly legal battles. Remember the Three Billy Goats Gruff? A patent troll is the big ugly troll underneath the bridge doing nothing at all but threatening any who come near it thinks it can exploit.

Another problem in the patent system is point four of the patent requirements: “must be non-obvious to someone in the industry.” You would think that the patent office would employ a bunch of industry experts to decide whether a patent application from a certain industry is valid. Nope. The people approving patents are rarely if ever knowledgeable about the industry to which the patent applies, and so industry-obvious things get patented all the time. Eventually in a lengthy court case a patent can be invalidated after an entity proves the obvious nature of a patent to someone in the industry, but again, that costs time and money.

With so many problems in the patent system, the tech world, and more specifically the mobile world, has seen rise of patent wars. Companies threaten other companies, waving their patent portfolios over their heads and threatening legal action. The other company responds with their patent portfolios and assertions that the attacking company is violating their patents too, and if they act against them they’ll attack back. It’s a lot like a war in which companies brandish their weapons like their stockpile of nukes and the other country shows their piles of nukes, saying “Really? Are you sure you want to start something?” Unfortunately, companies in the mobile world haven’t been backing down lately and ending uneventfully like the Cold War, so the mobile tech world is tied up like a giant spider web of legal disputes and patent battles. 

In the end, our patent courts are tied up, companies are paying millions in legal fees, and consumers pay the hidden cost in product prices. Innovation is slowed down in these companies as resources are devoted to protecting their precious patents and treading carefully with new products to not further entangle themselves in patent disputes. The whole point of the patent system was to encourage innovation and creation by protecting the inventor for sometime so he or she could get their product out there instead of being bullied out by large companies. Instead, patent law has become complex and burdensome, stifling the very creativity it was supposed to protect.

Intellectual Property: Beginnings

Henry George

Intellectual Property stemmed from the idea of Georgism, or Geonomics. Things in nature, especially land, is free and given by God, so should be held equally by all. People own what they create instead.

Lizzie Maggie was a big supporter of Henry George, the creator of Georgism, and built a game showing the evils of land ownership called "The Landlord's Game." Remember the board game Monopoly? Maggie’s idea kind of backfired when the game became so popular.
The term intellectual property applies to a whole host of different types of intellectual property:

1. Patents
2. Copyrights
3. Trademarks
4. Trade Secrets

People often get each of the different types confused. A patent lawyer is not the same thing as a copyright, just like a patent and a copyright are two different things.

The Original Monopoly:
The Landlord's Game

Beginning to Clarify

I'm really excited to start work on the final project of our Digital Civilization class. I will be working in the Intellectual Property and Creative Commons group along with Spencer Stevens, Gabriel Meyr, and Andre Benhaim. Intellectual Property is such a hot topic right now, as there are many lawsuits going on related to copyright infringement and patent violations. The goal of our group starting out is going to lay out the differences between all the intellectual property terms people get confused about, like what a copyright, trademark, registered trademark, license, patent, and trade secret is.

Intellectual property isn't any one of these, but rather the umbrella under which all of these fall. A copyright is a type of intellectual property. So is a patent. So is a trademark. Yet each one is different, and each one is governed by different laws, either on the federal or state level. Since each one is different, a copyright lawyer is not the same thing as a patent lawyer. To get along in today's digital world, especially if one wants to do business in today's digital world, understanding intellectual property and the differences between its different types is critical.

This isn't the place where all things related to intellectual property is going to be clarified, but here's a good link to get started: http://corecopyright.org/2009/12/03/copyright_ip/. Enjoy, and stay tuned :)

Fifth Amendment for Encrypted Hard Drives

Here's the followup post I promised about the story of the 11th Circuit Appeals Court upholding the Fifth Amendment as protection preventing forcing people to decrypt their hard drives. I actually started reading the source link at the article, which is the actual court document describing the court's ruling. It's really fascinating, and I was instantly absorbed. That's something I never thought I'd say about reading a legal document.

In class on Thursday, the control group brought up the case I talked about in my first post relating to the Fifth Amendment and encrypted hard drives, as well as the article sparking this followup post. I got so excited that they were bringing these two articles up that I immediately shared my biased opinion to the entire class about the matter. I think I may have ruined the exercise a bit, because the class definitely seemed poisoned my way, for the prosecuting half was definitely weak in their arguments. I couldn't even participate in the prosecuting half, to which I was assigned, because I had already made up my mind.

For those new to the matter at hand, let's talk about the problem. With the rise of technology in society, more and more cases are being brought to court where a evidence is suspected to be found on the encrypted hard drive of the defendant. With physical evidence, such as something in a safe or in someone's house, the court can issue warrants to search the house or break into the safe. An encrypted hard drive is another story. If the right encryption is used the right way, it can be virtually impossible to break the encryption and recover the data on the drive without the defendant's key. That key is usually in the form of a password.

This is how physical evidence and digital evidence differs. With physical evidence, the court can simply recover it with or without the express permission of the defendant, such as cracking a safe or breaking down the front door. With a properly encrypted hard drive, it could be impossible without the defendant's cooperation. Because of this, the prosecution wants to subpoena the defendant to cooperate or be held in contempt of the court.

The defendant's argument usually relies on the Fifth Amendment:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

The bolded phrase, stating that the defendant shall not be compelled to be a witness against themselves, is the key part. The court is asking the defendant to produce the unencrypted contents of the defendant's hard drive. However, the very act of turning what is encrypted to unencrypted implies ownership of the data on the hard drive. It therefore implies guilt is condemning evidence is to be found on the drive, and if the defendant is proven guilty solely or largely based on the unencrypted contents, then their producing the evidence is quite self-incriminating.

That's precisely what the lengthy court document upholding the defendant's right not to produce the unencrypted contents argues. I agree with their decision. The case in particular concerns child pornography, something so terribly the guilty should have millstone's strung about their necks and tossed into the sea. However, the principle of upholding the Fifth, not forcing self-incrimination is important. Imagine a corrupt government planting an encrypted hard rive in someone's home, and then throwing them in jail for contempt of the court when they failed to produce the encrypted contents. Or a person producing an unencrypted hard drive only to find documents placed their by someone else while the drive was unlocked, but a jury deciding the implicit ownership of the files by the defendant and pronouncing guilt.  Our Founding Fathers designed our system to let a few guilty men go free rather than condemn the innocent.